In the 1986 tax overhaul, Reagan taxed capital gains, the profits from investments, at the same rate as income from working. Booker, the New Jersey Democratic Senator running for president, on Wednesday proposed the same thing as part of a plan designed to ensure that wealthy Americans pay more in taxes.
He said his tax proposals could bring in up to $2 trillion in revenue over 10 years.
“Cory is proposing common sense reforms in how we tax capital gains to ensure our tax code rewards work over wealth,” campaign spokesman Tom Pietrykoski said. “Right now, workers pay disproportionately more in taxes on their income than wealthy investors do on theirs to the extent they pay any taxes at all. As president, Cory will work to transform our economy to create opportunity and deliver justice for all workers.”
Booker released his plan while supporting the United Auto Workers members striking against General Motors.
“As I stand with workers who are fighting for fairer wages and better benefits across the country, I’m outlining how my administration will ensure that our economy leaves no one behind,” Booker said.
Booker also proposed repealing those parts of the Republican tax law that benefitted corporations and wealthy Americans. He previously called for eliminating the $10,000 cap on the federal deduction for state and local taxes — something that hit high-property tax New Jersey residents harder than those in other states.
In addition, Booker called for lowering the value of estates subject to tax to $7 million for couples rather than the current $22.8 million. That’s the limit it was in 2009, when only two of every 1,000 estates were taxed, virtually none of them family farms or small businesses.
Besides the tax changes, Booker released proposals to directly help workers, including raising the minimum wage to $15 an hour, expanding child care, offering family leave, and beginning a program in up to 15 depressed areas in which anyone who wanted to work but couldn’t find a job would get a full-time federal government position.
He also called for making it easier for workers to unionize to negotiate for salaries and benefits; to ban right-to-work laws, which allow those in unionized workplaces to avoid paying dues even though they are represented by a union. He also wants to make it harder for companies to classify workers as independent contractors so they can avoid paying them the minimum wage and offering benefits.
Earlier, Booker proposed a plan known as the Rise Act, which would increase the earned income tax credit that goes to lower-income working families and would be paid for in part by increasing taxes on the wealthiest Americans.
Booker’s capital gains tax plan is aimed at richer residents. Currently, capital gains are taxed at 23.8 percent compared to a top rate for earned income of 37 percent. And 78 percent of capital gains income goes to the richest 1 percent of taxpayers, according to the Institute on Taxation and Economic Policy, a progressive research group.
While capital gains on stocks now are paid only after they are sold, Booker proposed requiring investors to pay taxes every year on the increased value of such holdings that exceed a lifetime exemption of $2 million.
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